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India'sinsurancepenetrationdeclinesforsecondconsecutivefiscalyear-The Economic Times

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harshilkaneria.dm254025
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Industry

English Edition | 18 January, 2025, 09:00 AM IST | Today's ePaper

India's insurance penetration declines for second


consecutive fiscal year
ET Online Last Updated: Dec 25, 2024, 12:22:00 PM IST

Synopsis
India's insurance penetration dipped to 3.7% in FY24. Life insurance penetration
declined to 2.8%, while non-life insurance remained at 1%. Global insurance penetration
rose to 7% in 2023. Life insurance premium income grew 6.1%, led by the private sector.
Non-life insurance saw a 12.8% increase, driven by health and motor insurance.

ANI
India's insurance coverage decreased in
the fiscal year 2024 (FY24), marking the
second consecutive year of decline. The
Insurance Regulatory and
Development Authority of India
(IRDAI) annual report, released
Monday, shows penetration, the ratio of
annual premiums to GDP, fell to 3.7% in
RELATED FY24 from 4% in FY23. This follows a
Claims ratio of non-life insurers dips to peak of 4.2% during the Covid period.
82.52% in FY24: Irdai report

Insurers report rise in commission Life insurance penetration saw a


expenses
slight drop to 2.8% in FY24, compared
to 3% the previous year. Non-life
insurance penetration held steady at 1%. Despite the decline in overall
penetration, the per capita premium (insurance density) rose slightly from $92
in FY22 to $95 in FY23. This contrasts with the global trend, which saw
increased insurance penetration. The global average reached 7% in 2023, up
from 6.8% in 2022.

The life insurance industry's premium income reached ₹8.3 lakh crore in FY24,
a 6.1% increase, slower than GDP growth. Private sector life insurers saw
premiums grow by 15.1%, while the public sector grew by only 0.2%. Benefit
payouts totaled ₹5.8 lakh crore, representing 70.2% of net premiums.
Surrenders and withdrawals increased by 15.3% to ₹2.3 lakh crore, with public
sector life insurers accounting for 58.4% of that amount.

The non-life insurance sector collected ₹2.9 lakh crore in direct premiums, a
12.8% rise. This growth was primarily driven by increased health and motor
insurance premiums from individuals. General and health insurers settled 2.7
crore health insurance claims, paying out ₹83,493 crore. Excluding health
insurance, general insurers paid out ₹1,01,050 crore in claims. Private general
insurers paid 55% (₹55,524 crore), public sector insurers paid 32% (₹32,131
crore), and specialized insurers paid 13% (₹13,396 crore).

Total industry investments reached ₹67.6 lakh crore as of March 31, 2024, up
12.6% from ₹60 lakh crore the previous year. Life insurers accounted for 91.1%
of these investments, general insurers (including specialized and standalone
health insurers) for 7%, and reinsurers (including foreign branches) for 1.9%.
Public sector entities held 69.5% of investments, while the private sector held
30.5%.

(with ToI inputs)

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